Public Bill Committee

[John Bercow in the Chair]

Clause 88

Payment by instalments: making and enforcing charging orders

Amendment proposed [this day]: No. 136, in clause 88, page 57, line 5, at end insert—
‘(9) Where the judgment that is the subject of a charging order application relates to an agreement regulated by the Consumer Credit Act 1974, the court shall not make a charging order if an order under sections 129 to 135 of that Act is appropriate.’.—[Mr. Bellingham.]

Question again proposed, That the amendment be made.

John Bercow: I remind the Committee that with this we are taking amendment No. 137, in clause 88, page 57, line 32, at end insert—
‘(4F) Where the judgment relates to an agreement regulated by the Consumer Credit Act 1974, the court shall not enforce the charge by an order for sale.’.

Brooks Newmark: Once again, Mr. Bercow, it is a delight to see you in the Chair. I was in full flow when time was called on the morning sitting, and I would now like the Minister to clarifyan issue concerning charges over assets. It is my understanding that, once a deal has been done, when payments of an amount have been made over a certain period, and once the agreed debt has been pegged down, individuals will not incur additional charges should they suddenly gain further assets. Will the Minister clarify that?

Vera Baird: The essential precondition for a charging order is a judgmentdebt. Before going to court, the parties may reach a compromise. If the hon. Gentleman lends me £10,000 and I say that I will never be able to pay it back, but then say that I will repay £5,000 in six months, we can make an agreement on that basis. I get half my debt remitted and the hon. Gentleman gets £5,000 when he might have had nothing. If we agree to such a contract, there will be no debt left. If I subsequently come into further assets, there will be no debt on which to charge those assets. I hope that that clarifies the matter.
I should make it clear, if I did not do so earlier, that there is no intention that a charging order should be converted to an order for sale while the debtor is still paying their instalment order. The measure offers extra protection, but it is not intended to be used in thatway. With that, I hope that the hon. Member for North-West Norfolk will withdraw the amendment.

Henry Bellingham: Is the Minister saying that, if instalments are being paid on time and the instalment register is up to date at all times, there cannot be an order for sale? That is not in the Bill. Will it be in the regulations?

Vera Baird: Clause 88 (2), proposes a new subsection (7) to section 1 of the Charging Orders Act 1979, so that it will state:
“The fact that there has been no default”
will
“not prevent a charging order from being made”.
Proposed new subsection (8) states:
“But if there has been no default, the court must take that into account when considering the circumstances of the case under subsection (5).”
As I understand it, as long as instalments are being paid, those measures will prevent forced sale. By way of further clarification, the Bill adds a section (4C) to section 3 of the 1979 Act, which states:
“The charge may not be enforced unless there has been default in payment of an instalment under the instalments order.”

Henry Bellingham: I am grateful for that explanation, on which basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Simon Hughes: I want to ask the Minister about one of the provisions in the clause. I was going to raise the issue when speaking about amendment No. 136, but it has been withdrawn. The amendment addresses a kind of mediation—steps that could be taken beforehand so that people would not get into the difficulties involved with charging orders and possession orders. It seems to me that that area is absolutely one for the courts, and that the mediation process and some informality are valuable.
The Minister will recall our earlier debate on how, even when there has been no failure in payment, people can return to court and ask for a charge. With respect to enforcement of charging orders, other enforcement, and changes in debtors’ obligations, what facilitieswill be in place to ensure that all courts offer an opportunity for agreement and negotiation before matters are heard by a judge? Are people offered the chance of some sort of mediation or arbitration in all county courts and High Courts, along with referral to appropriate agencies? The more that that can happen instead of litigation, the better.

Vera Baird: Has the hon. Gentleman returned to amendment No. 136, which we discussed this morning?

Simon Hughes: No. I meant amendment No. 138.

Vera Baird: There is never anything to stop one party to a court case discussing the case with the other party. That can occur through mediation that is initiated from within the community, for which several schemes are available, or through a more formal process. In many county courts there is now every encouragement for some sort of proportionate dispute resolution. Pre-action notices and pre-action protocols are alsobeing piloted in various jurisdictions with the intentionof building a mediation or proportionate dispute resolution element into court proceedings. Nowadays, the whole civil justice system is geared to the assumption that one goes to court only as a last resort. Even when people apply to court, it still has the opportunity to persuade them to take a different course rather than rely on its adjudication powers. There is therefore already every opportunity for what the hon. Gentleman desires.

Simon Hughes: I shall push the Minister a little further, if I may. I am thinking of a situation whereby, today or tomorrow, she, I or you, Mr. Bercow, go to Lambeth county court or Westminster county court in the context of an enforcement proceeding. I am trying to establish whether the court official who first dealt with the case—the listing officer who handled the paperwork—would say, from the beginning and as a matter of course, to applicants, debtors or creditors, “Are you aware that there is someone who may be able to help you with this?” If the problem were with a debtor, would the official ask whether the debtor was aware of the existence of money advice centres and ascertain whether the debtor had spoken to such a centre? Would the official inform that person of the centre’s opening times?
We all know that, with a bit of advice, people can often get out of a hole. For instance, people can be persuaded to transfer their bank or credit company obligations to a credit union that will not charge an annual percentage rate of 27.5 per cent. So is there an assumption in all parts of the court system—county courts and High Courts—that people should be proactively pointed towards money advice and resolution before the case is listed? Creditors might want people to go straight to court, so are court officers obliged to consider alternatives—I hesitate to use the term “cooling off period”?

Vera Baird: There is nothing to stop debtors from switching their debt to a credit union if they want to. I cannot see what that has to do with the courts. People might or might not know that they can do it.

Simon Hughes: That is the issue.

Vera Baird: But the court may not know whether a credit union exists in the area. They do not exist in every area.
Various piloted pre-action protocols are on the go that involve more or less formal offers of mediation, as the case may be. There are, of course, civil procedure rules that create a general duty on all parties coming to court to settle before the hearing. They are backed up with the ability to make an adverse costs order so that, if the creditor had not taken the steps to which the hon. Gentleman referred, the situation might be deemed unreasonable and produce an adverse consequence if there was an obvious way out of the difficulty. At various stages in the procedures, the court will send notices about where advice is available. Sometimes, it is available at the court itself. Realistically, every effort is made to ensure that the court is, as it is intended to be, only a last resort. I hope that my explanation has satisfied the hon. Gentleman, because I have nothing more to say about the clause.

Simon Hughes: I am grateful to the Minister. We do not have different objectives. I am keen on the matter. Perhaps those who administer our courts will read the report of our proceedings. If they are not in one of the famous pilot areas, they might reflect on whether their processes give the maximum opportunity for people to be pointed in the direction of other court processes that can resolve the issue. I shall reflect on what the hon. and learned Lady said. Obviously, we can return to the matter.

Question put and agreed to.

Clause 88 ordered to stand part of the Bill.

Clause 89 ordered to stand part of the Bill.

Clause 90

Application for information about action to recover judgment debt

Question proposed, That the clause stand part of the Bill.

Henry Bellingham: I have a quick question about the clause. This part of the Bill is headed “Information requests and orders”. Given the title of the clause 90, I am intrigued by the wording of the provision because it states that a person who is the creditor in relation to a judgment debt
“may apply to the High Court or a county court for information about what kind of action it would be appropriate to take in court”.
In my experience of such issues, albeit many years ago, I should not have thought that there was any need to apply to the court for the information. It should be readily available anyway. Is the clause simply a back-up measure for that small number of extremely rare cases when the information is not readily available so that, if a creditor wants to enforce a debt, he would have to take the matter to court by way of an application to find the information? Will the Minister elaborate on the process?

Vera Baird: It is the gateway for creditors to get the information request or the order that they need. Asthe hon. Gentleman rightly pinpointed, it is not about the creditor being advised about what is available as a route to recovery. The clause opens up the possibility of obtaining information that will undoubtedly steer the way forward for the judgment creditor. If the court can supply, for example, a new employer, the obvious way forward would be to attach the earnings. However, if a new address or a new national insurance number was available under the provisions to follow, that would point in another direction to a different enforcement. The clause is a gateway provision to enable requests for information to be made.

Question put and agreed to.

Clause 90 ordered to stand part of the Bill.

Clause 91

Action by the court

Henry Bellingham: I beg to move amendment No. 146, in clause 91, page 58, line 34, leave out from ‘make’ to end of line 37 and insert
‘an information order in relation to the debtor.’.

John Bercow: With this it will be convenient to discuss the following amendments: No. 147, in clause 91, page 58, line 41, leave out ‘a request or’ and insert ‘an’.
No. 148, in clause 91, page 59, line 1, leave out subsection (5).
No. 149, in clause 91, page 59, line 7, leave out ‘request or’.
No. 150, in clause 91, page 59, line 11, leave out ‘request or’.
Clause stand part.

Henry Bellingham: The group of amendments is about finding out exactly what information can be gleaned from Departments. I am concerned about clause 91(2), which states:
“The relevant court may make one or more of the following in relation to the debtor...(a) a departmental information request; (b) an information order.”
Subsection (5) states:
“The relevant court may not make a departmental information request to the Commissioners unless regulations are in force”.
The clause effectively states that requests for information can be put to a Department, although it does not specify which one.
It is important that we look more closely at what is entailed. I am concerned, as are many people, that the tendency of all Governments in this age of hi-tech and IT is to try to accumulate more information abouttheir subjects and to centralise information. In that way they can have more control over us. Looking forward to what will be possible in future, with further technological advances, I envisage many Departments holding a lot of information on citizens.
Clause 91(2) enables a creditor to ask a court to secure information from a Department about the status—possibly even the financial status—of the debtor. What protection is there for the debtor? How much information can be released? What constraints will there be on a Department in terms of releasing such information? What about confidentiality of information and data? In the other place, Baroness Ashton of Upholland addressed some of those concerns and mentioned that specified pieces of information could be made available, particularly from Her Majesty’s Revenue and Customs. However, having read her response to the short debate in the Houseof Lords, I am concerned about the paucity of the evidence that she gave, which was able to satisfy the noble Lords that this would not be an intruder’scharter and not an opportunity for Departments to supply information on debtors that might be highly confidential.
I am greatly concerned about the principle ofbeing able to get such information from a range of Departments. Our amendment would removeclause 91(2)(a) and (b) and delete subsection (5) and the references to Departments, because we believe that the clause is going too far. I will not push your good will, Mr. Bercow, by mentioning clause 92, which gives more information about what sort of information can be released. We are looking at the principle—

John Bercow: Order. I say to the hon. Gentlemanin a spirit of good will that he is in no danger of exhausting my patience, because clause 92 stand part falls within the group with which we are dealing. Therefore, he is free to expatiate as he wishes.

Henry Bellingham: I like the word “expatiate”, Mr. Bercow, but I will not push your good will to its literal conclusion. You are right. I did not want to go into too much detail on clause 92, because no specific amendments to it have been tabled, but I take your point that we can discuss it in under this group.
Clause 92 lists the type of information that can be requested. The Minister may argue that it is limited, simple and basic, but what is “prescribed information”? Will that be made clear in the regulations? Should we really give creditors this amount of power to go to Departments? If we trusted the Government to play fair with consumers, customers and citizens in respect of how information is released already, I would be a great deal more content and relaxed. However, I am not content and relaxed, which is why I have tabled the amendments and moved my amendment.

Jennifer Willott: I want to comment on the points raised by the hon. Member for North-West Norfolk. I share his concerns about the requirement to ensure that information available is well protected in order to safeguard people’s right to privacy. However, I have a question, to which I would like him to respond, if possible. The Conservatives have said that they would like to remove entirely from the Bill departmental information requests, but also to provide in clause 92 for extra information to be made available to creditors—in particular, on driving licence numbers and vehicle registrations. I am confused by the idea that at the same time as wanting no information made available, there is a request for additional information. I would be grateful if the hon. Gentleman could clarify that point.

Henry Bellingham: I am happy to explain the situation to the hon. Lady. If my amendments are accepted by the Government and the ability to go to Departments is taken out of the Bill, clause 92 would have a different application. We suggest that the Committee accept my amendments, but if it does not, and the provisions in clause 91 remain, I shall not discuss driving licences and vehicle registration—at this stage. However, such information is basic and could not be regardedas confidential. I am concerned about Big Brother breathing down the necks of citizens and obtaining more and more confidential data. I appreciate the hon. Lady’s point. On the face of it, our stance might seem illogical and I appreciate her giving me the chance to explain it.

Jennifer Willott: I shall come back to that point on the next group of amendments.

Simon Hughes: I want to make the sort of general points that the hon. Member for North-West Norfolk made and to ask the Minister some questions.
Obviously, we have welcome processes in place for data protection, as well as legislation on freedom of information. I assume that if the Bill is passed, the provisions before us will override the current data-protection arrangements. I should be grateful to know whether they go down the route that the hon. Gentleman suggested and will make further inroads into what personal data is protected. Is this a change in the law or is this retaining the current position? If it is a change in the law on access to further data, what steps have the Government taken to talk to the data protection authorities to ensure that the Information Commissioner is comfortable with the new procedures? Will the Minister reassure us that objective people outside Government have looked at the matter and said that there is nothing to worry about?

Vera Baird: A lot of objective people inside Government have taken account of data protection. I know that the hon. Gentleman has never been in Government, and I am only a lance corporal myself, but such matters are discussed across Government. Legislative clearance must be given by all Departments to all legislation. We do not go sneaking things on to the statute book without telling our colleagues in other Departments and then say, “Aha, we have got you now!” Obviously, the provisions before us are a change in the law. But are they quite as terrifying as people are suggesting? Look at the information that can be requested—name, address, date of birth and national insurance number of the debtor. That is not terrifying stuff. One must be a judgment creditor before being entitled to apply for such information. Palpably,the gateway provision that I have just discussed with the hon. Member for North-West Norfolk deals with the difficulties of enforcement. Her Majesty’s Revenue and Customs might possess information necessary just to click things into place and permit the enforcement of a debt that the court has said ought to be enforced.
In such a situation, the information would be disclosed not to the creditor, but to the court. That is why the gateway provision is important. The creditor could then ask the court, “How should I proceed from here?”, and the court could say, “Well, why don’t you go down the attachment-of-earnings route or some other route?” It will have information to direct the creditor.

Jennifer Willott: What information does the Minister see as falling under “prescribed information”, which is the general catch-all at the end?

Vera Baird: It is not a general catch-all. It mustbe carefully dealt with. What we are looking at is nomenclature changes in Government or some Government services. In other words, changing the means by which information is requested. We have no intention of asking for sensitive tax information, which may be held by Her Majesty’s Revenue and Customs. There is a control over the use of any power, which is that it must be compatible with the purpose set out. There will be no conceivable purpose in disclosing sensitive tax information to a court whose sole function is to implement a judgment debt. Therefore, the court could not ask for it and would not get it.

Jennifer Willott: The Minister may have misunderstood my intention. I was not trying to make a stroppy point. I was asking what sort of information would fall into that category.

Vera Baird: I did not think for a moment that the hon. Lady was being stroppy. However, I think that I have answered her question. There are tough criminal sanctions for anybody who misuses that kind of information, and I am sure that that is reassuring. Since the information will go not to the creditor but to the court, I think that all concerns about Big Brother can be set firmly aside. I have made it clear that “prescribed information” will be for the purposes that I have said—technical changes in how to approach a Department or to access the way it stores its information. I have also made it clear that there is a control over the use of any power, according to its purpose. Given that the court is interested only in accessing that information to enable the proper and due obtaining of a debt, it cannot seek any sensitive information, and such information would not and could not be disclosed. A judgment creditor will make a request to the Department for information. The court will process that request and then advise how to enforce the debt. The information will go no further than the court; it will not go back to the creditor.

Simon Hughes: I am grateful to the Minister, butI have two ancillary questions. First, once the application has been made and the court has answered the question, how long does the court then hold on to the information and, physically, what happens to it? Is it destroyed? It is a question about the guarantee that the debtor has that there is not a lot of information about them around the place.
Secondly, does the debtor have the right at every stage to ask for any information held by the courts to be made available to them? I presume that they do. How do they do that? Are they alerted to the factthat the court has the information? Just as we are all entitled to pay our money and get a credit reference print-out—I think that we can all do that if we want to—does the same apply here? If someone wants access to the information held by a court, or which they believe to be held by a court, can they make an inquiry? Will the court give them an accurate answer? Will it tell them whether it holds such information, since when and until when? Will the court tell them what the information is, if it is asked? Does a debtor have to pay for such information. What is the process if the debtor wants to know what is going on?

Vera Baird: The hon. Gentleman has slipped back into pub quiz mode again. The information that we are talking about is the man’s name, address, date of birth and his national insurance number, and that is it. We do not want to know the name of his latest mistress or how much he owes the Inland Revenue or anything else at all. There is nothing in this that changes the general law about the information rights of an individual. The court will give them notice that an order has been sought and the court will give them the information that they ask for, but I cannot imagine anyone wasting their time asking whether it has their name or not. The debtor will already know that there has been a request. If they want to, they can block such a request, but it will be very hard to block if someone already has a judgment debt before them. What else can I tell the hon. Gentleman so that he feels that he has had answers to his questions? If the information is not to be used, it will be destroyed. If it is to be used, it will not be destroyed; it will be used. Is that satisfactory? Can I do more?

Simon Hughes: I will ask one last question. Obviously, people know what their name and address is. I was more concerned about the more general information in the prescribed information category. Fine, I understand that if the information is not to be used, it will be destroyed, but I presume that the court keeps it for a period. Again, I am not trying to elicit information that is difficult to find, but there is a normal procedure whereby information is held by authorities for a certain time. If the police have information, they are entitled by law to hold it for a certain time—some information indefinitely and some for a certain period. Does the Minister know whether there is a one-year limit? Can she tell us or point me in the right direction? Her compendious knowledge, with the help of her civil servants, as to where all these bits of information are to be found is greater than the compendious knowledge even of all of us on the Opposition side of the Committee.

Vera Baird: Does the hon. Gentleman want my compendious knowledge or that of my civil servants? There is no change to data protection; there is no change for the Information Commissioner; there is no change to all the things that we have grown used to in the legislation. So that he has perhaps a better grasp of what “prescribed information” means, let me set out what the provision might also enable the court to request.
After careful consideration by the Government, and with the agreement of Revenue and Customs, it might be possible to use prescribed information as a category to request the details of the owners of a limited company if something were standing between, as it were, the creditor and the name and address of that person. It would not simply follow that it was the debtor’s name and address, because the name and address of the debtor could be that of Smith and Brown Ltd, and perhaps under prescribed information, in certain circumstances, people would want to go beyond that to get the actual people whose money they wanted to get at. That is, I think, the broadest category to which those who assist me have considered that the application of prescribed information might extend. We will set that out in regulations, of course, if it ever comes to pass, and there is a retention schedule, apparently, which is applicable to all information held by Her Majesty’s Courts Service.

Henry Bellingham: May I make a recommendation to the Minister? Further references to pub quizzes might be slightly risky, because I understand that in the unlikely event of there being a hung Parliament and a coalition between the Labour party and the LibDems, the hon. Member for North Southwark and Bermondsey might be the hon. and learned Lady’s boss in a future Administration. I therefore strongly suggest that they do their level best to ensure that relations from now on are as cordial as possible—I know that I am digressing a little bit.

John Bercow: Order. The relationship between those observations and amendment No. 146 is at best tenuous, and more likely non-existent.

Henry Bellingham: Thank you, Mr. Bercow. I take the light rap over the knuckles in the spirit in which it was delivered.
We were right to put on the record our concerns about the way in which future Governments might abuse information and the fact that Governmentshave a tendency to disseminate information across Departments. Checks have to be in place and there has to be a responsible attitude to the way in which that information is used in future, but I am grateful to the Minister for the way she has explained the provisions, and on that basis I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 91 ordered to stand part of the Bill.

Clause 92

Departmental information requests

Henry Bellingham: I beg to move amendment No. 151, in clause 92, page 59, line 22, at end insert—
‘(da) the driving licence number and vehicle registration of the debtor;’.

John Bercow: With this it will be convenient to discuss amendment No. 152, in clause 92, page 59,line 28, at end insert—
‘(ca) the driving licence number and vehicle registration of the debtor;’.

Henry Bellingham: We have referred briefly to these amendments. In fact, the hon. Member for Cardiff, Central alluded to them, although she was out of order in doing so, and we have discussed clause 92 stand part. 
The amendments are very simple. If clauses 91 and 92 are to stand part of the Bill, and if clause 92(3) sets out the sort of harmless, straightforward information that could be made available, putting the driving licence number and vehicle registration of a debtor on that list would add to the information that is easy to access, and it would be perfectly acceptable for that information to be made available to the court incertain circumstances. My suggestion would assist the Government, and I hope that they examine it carefully.

Jennifer Willott: Will the Minister give us some information about the circumstances under which she believes it would be of benefit to the courts to have information about an individual’s driving licence number?

Vera Baird: It is not my amendment, and I have no reason to think why I might want something thatthe hon. Gentleman offers. However, we do not need the amendment because we can already access the information through an electronic link to the Driver and Vehicle Licensing Agency. I therefore invite him to withdraw the amendment.

Henry Bellingham: Will the Minister elaborate further? She says that there is an electronic link, but between what? Is it between the DVLA and the Courts Service, so that if courts want to get the information they can do so readily? Can they get it without the permission of the individual in question?

Vera Baird: Yes, that is correct. The county courts and the High Court have access to the information through an electronic link with the DVLA.

Henry Bellingham: I am most grateful to the Minister for that explanation. On that basis, she has satisfied me and explained that the amendments are unnecessary. We want to keep the Bill as tight and as focused as possible, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 92 ordered to stand part of the Bill.

Clauses 93 to 100 ordered to stand part of the Bill.

New Clause 4

Assessing household income
‘(1) The debtor must, at the prescribed times, provide the proper county court with household particulars of—
(a) earnings,
(b) income,
(c) assets,
(d) outgoings, and
(e) liabilities.
(2) For the purposes of this section, “household” is to be considered as the aggregate income for a family or couple co-habiting.
(3) In this section “prescribed” means prescribed by regulations made by the Lord Chancellor.’.—[Mr. Bellingham.]

Brought up, and read the First time.

Henry Bellingham: I beg to move, That the clause be read a Second time.
The new clause is simple and straightforward, but significant because we want to define household income in relation to attachment of earnings orders to make it absolutely clear that the key relevant figure to be considered by the court is net household income.It is important to consider liabilities and define household income.
When an attachment of earnings order is made, there should be a clear definition of the earnings that are to be attached so that, if there are extra overheads or other liabilities, they can be taken into account. I imagine that a court would normally do that, and of course it will use common sense and judgment to consider the income, overheads and commitments of a family. They may have young children, an elderly, ill relative or other commitments, or mortgages might suddenly go up or the household runs into major problems over managing its income and making it go as far as possible.
We all come across such examples in our constituencies, not least as a consequence of actions—even rightful actions—by the Child Support Agency. People come to our constituency surgeries and talk about the problems that they face as a result of attachment of earnings orders, and they often argue convincingly that some of the liabilities and outgoings in their household are not catered for or taken care of. Most of the time, the courts will get that right. They will consider the overall picture and make a decision that is fair and balanced.
Obviously, courts have guidance on deciding on the attachment of earnings order, but what other guidance is there? Will there be any guidance in the regulations? Would it not make sense for a new clause specifically to lay down what can be considered? Is there not merit in having a clause to assess household income and make the rights of a debtor absolutely clear? Above all, it should be made clear that the debtor must make the information available, but at the same time the court must listen to what the debtor is saying so that we end up with a completely balanced, fair picture of the situation.
In the spirit of what I have said, I hope that the Minister will consider the new clause carefully, constructively and favourably.

Vera Baird: I am not entirely sure which clause the new clause is intended to support. It may relate to an assessment that is required at any time—

Henry Bellingham: Yes, indeed.

Vera Baird: It certainly does not seem to attach to one particular part of the Bill, although the hon. Gentleman has mostly talked about attachment of earnings orders, so that is perhaps what he is primarily concerned about.
Similar amendments were tabled in Grand Committee in the Lords by the hon. Gentleman’s noble Friend Lord Kingsland. We understood then that the amendments had come from a lobby group that was worried about the rise in creditors and thought that indebtedness should be assessed at household level rather than that of the debtor. If that is the hon. Gentleman’s purpose, we are deeply opposed to it. It should be the debtor and the debtor’s income only that are taken into account.
Let me make a slightly more technical point. The way in which deductions are calculated for all varieties of attachment of earnings order are in the Attachment of Earnings Act 1971. The new clause, standing free in the Bill, would not interface with that Act. Attachment of earnings orders are used by lots of Departments and many branches of the judicial system, and not only by those with which we are dealing. We run the risk of a fundamental change to the law having an effect on those areas outside this Department’s remit.
The proposal would replace the existing attachment of earnings order system with fixed tables. The court would not determine the debtor’s means exactly, as such, and it would be the debtor’s earnings from which the deductions were made by the employer. There are obvious practical reasons why that would be difficult to change, but there are legal principles, too. When an attachment of earnings order or any form of execution are concerned, we should consider the debtor’s income, because it is their debt. That seems central to us; it should not relate to other income in the household. I do not know whether the hon. Gentleman appreciated that that would follow, because what is being spoken of is household income.
The problem is that if I, as a mother, had a debt and my grown-up sons lived with me, they would have to submit to an assessment under the provision to see whether it would be appropriate for their income to be lent to me to get rid of my debt. What should be considered is what I am earning and at what rate I can pay off the debts. That is the mischief of the new clause, and I hope that I have made that clear. A new means form will be developed for the attachment of earnings procedures, which will cover lots of information. I imagine that it will cover all the information that anybody would wish it to. The court will carry out a thorough investigation before it makes any orders at all.
I hope that I have satisfied the hon. Gentleman that the proposal is mischievous rather than helpful, and that there are satisfactory provisions in place that will be superseded by a thorough means form. It will ensure that appropriate generosity is given to poor debtors and that appropriate, fair enforcement is provided for creditors.

Henry Bellingham: I am grateful to the Minister for her explanation. The new clause was not meant to be mischievous. I slightly resent the word “mischief” being brought into the discussion; far be it from me ever to try to create mischief. The new clause was designed to give the Minister the opportunity to explain more fully to the Committee exactly how household income will be assessed. On the basis of her explanation, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 7

Requirement for permission of court before enforcement
‘The Civil Procedure Rules must provide that no order for possession, whether made in the County Court or the High Court or in any other court of civil jurisdiction, shall be capable of being enforced without the appropriate court first granting permission to issue a warrant of possession to a party whohas applied, on notice to the occupying party, for such permission.’.—[Simon Hughes.]

Brought up, and read the First time.

Simon Hughes: I beg to move, That the clause be read a Second time.
I hope that the Minister will be sympathetic to the new clause. It was tabled specifically followingan approach by Vivien Gambling, the chair of the Housing Law Practitioners Association, a well-regarded organisation of which the Minister will know. I shall describe the new clause as the association does, as the proposition comes via us from the association.
The new clause is concerned with the manner in which orders for possession of land are enforced. The current law allows a lender or landlord to enforce an order for eviction in the county court by completing an administrative form in the court office. That might result in the enforcement of the order without notice to the occupier, and without lender or landlord having to give evidence of any breach. The risk of injustice to the occupier is obvious. In the High Court the party seeking a possession order has to apply for permission on notice for a warrant to issue.
The new clause would align the procedures across all civil courts, so the risk of injustice would not arise. A short supplementary note was prepared by Nowsheen Bhatti, the association’s parliamentary officer, which it will be helpful to put on the record as it completes the argument:
“The vast majority of possession orders are made against tenants of social landlords (councils and housing associations) and home-owners (mortgage borrowers). The bulk of those are orders ‘suspended’ or ‘postponed’ on terms which provide that the order shall not be enforceable so long as the occupier complies with certain conditions (e.g. to pay the mortgage instalments or the rent or to comply with other tenancy conditions). A lender or landlord wishing to enforce an unconditional order or a ‘suspended’ or ‘postponed’ order (e.g. in the belief that the terms have not been complied with) may obtain a bailiffs warrant for eviction in the County Court by the simple completion of an administrative form...In the High Court, the practice ...is currently reflected in the Rules of the Supreme Court RSC Ord 45 r3)...The need for such amendment was well demonstrated by the case of a council tenant who was evicted while going in and out of hospitals for treatment {Leicester CC v Aldwinkle [1992] 24HLR 49). In that case, the Court of Appeal said that the injustice would not have arisen had the practice of the County Court been the same as that of the High Court. This amendment is long overdue.”
From my constituency experience, I can say that that is a common state of affairs. It might be slightly different in other constituencies; I think that I still represent a larger proportion of council tenants than any of my colleagues in England. Such situations arise often with council property and, as the notes said, they arise with similar frequency with social housing, housing association and housing trust property. They also arise in the context of people who are paying off a mortgage. People regularly get into trouble. Cases regularly end up going to court and the court, in the first place, normally makes a suspended possession order and lays down the conditions. If we believe—as we do, and the law has obviously established the principle—that nobody can be deprived of their occupancy without a court making that decision, it seems absolutely vital in the interests of justice that, if someone is on notice that they might lose their possession and matters then develop, there should at least be an opportunity for a hearing before a judge who can weigh the balance of the argument.
The case cited—the Leicester city council case—was a case where somebody was in hospital. There may be many circumstances where entirely unforeseen and unpredictable events arise: somebody may have a heart attack or a stroke, suffer bereavement, have a terrible accident, become mentally ill, be coping with the severe illness or death of a relative, and so on. Therefore, it is not sufficient that a piece of paperwork turns the threat over someone’s head into the reality of people coming to throw them out. I hope that this measure is something that the Minister can be sympathetic to and I commend the new clause to the Minister and hon. Members in all parts of the Committee.

Vera Baird: The new clause is not related to any provision in the Bill; it is an attempt to compel the Civil Procedure Rules Committee to amend the rules about enforcement of possession orders. I heard what the hon. Member for North Southwark and Bermondsey said about justice, but this procedure has been found to be entirely compatible with the Human Rights Act 1998 by the Court of Appeal. Consequently, there is no clash with justice implicit in the procedure.
Additionally, we have a Civil Procedure Rules Committee to which the hon. Gentleman’s constituent can rightly direct submissions for changes to the civil procedure rules through the hon. Gentleman, by writing in any way and at any time that she wishes. Perhaps she has already done so. The Committee will take her comments into account. There is absolutely no doubt that it considers carefully all the procedural rules that are required and amends them as and where necessary.
Parliament has given the responsibility for changing the civil procedure rules to that Committee; thereis no justification, in this instance, for removing that responsibility. There is a parliamentary procedure for objecting to rule changes by the Committee, and the Government are content with that position.

Simon Hughes: That is a less sympathetic response than I would have hoped for. The Minister is right and, of course, there is a Civil Rules Procedure Committee and a Courts Rules Committee. However, we are just about to deal with the rules of the county court. The Bill is amending the way in which our courts act. We have just dealt with a part headed “Enforcement of judgments and orders”. The new clause is entirely in line with those issues: it concerns enforcement of judgments. Elsewhere, the Bill deals with both the legislation and regulation of courts. The Minister and her colleagues have spatchcocked into the Bill a measure that we will come to later, related to works of art, which appears to be entirely unrelated to anything else in the Bill. It is certainly far less connected with these matters than the new clause.
The Government are used to accommodating something that is appropriately linked to a Bill. I ask the Minister to think again about the new clause. If I may say so, her reaction was an instinctive procedural reaction as to why another route is better. Here is a legislative opportunity to do something that we could do easily. I am not aware that there has been any great objection anywhere in the profession or, indeed, in the judiciary, to the measure. It seems to be an opportunity for a Labour Government to implement a bit of social justice. The Minister keeps telling us how committed she is to social justice. I hope that this is an opportunity for her to confirm her commitment to that ideal and to say that this measure is a way of ensuring that we have fewer people out on the streets as a result of some failure of the system than we would otherwise have. I hope that she might reconsider.

Vera Baird: The hon. Gentleman is barking up the wrong tree, I am afraid. This has absolutely nothing to do with social justice, but with us in Government not wanting to order the High Court judge who runs the civil procedure rules committee to get his act together and do a summersault just to please the hon. Gentleman. He can write to the High Court judge, using all his measureless rhetorical power, to try and persuade the judge to change the rule. That is the right procedure and the one that we will stick with.

Simon Hughes: I am always willing to take suggestions. However, I am always willing to tryand persuade Governments to act. Sometimes one succeeds; sometimes one does not. I will reflect on whether or not to come back to this during the Bill, and the Minister might reflect on that too. I may see if I can get some support from the judiciary between now and Report. In the mean time, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 101

Administration orders

Brooks Newmark: I beg to move amendment No. 163, in clause 101, page 66, line 13, after ‘may’, insert
‘subject to the discretion of the court’.

John Bercow: With this it will be convenient to discuss the following amendments:
No. 164, in clause 101, page 66, line 15, after ‘may’, insert
‘subject to the discretion of the court’.
No. 167, in clause 101, page 66, leave out lines 30to 32.
No. 165, in clause 101, page 66, line 30, after ‘may’, insert
‘subject to the discretion of the court’.
No. 166, in clause 101, page 66, line 33, after ‘may’, insert
‘subject to the discretion of the court’.

Brooks Newmark: Once again, we have quite a few points to go through, but I will try and be brief. If I have any questions for the Minister later, I will also try to brief, as I appreciate that time is pressing.
In seeking to move our amendments Nos. 163 to 167, we are looking at the repayment requirement that can be imposed on debtors who are placed under an administrative order by a county court. To be clear to the Minister, this is a probing amendment. We are trying to establish who is in control of determining the repayment requirement imposed on debtors. My concern with the clause is that there seems to be two sources of authority when it comes to determining the requirement. First is the implied discretion of the court making the order—I emphasise implied. Second is the regulations to be made in due course by the Lord Chancellor.
Amendments Nos. 163 to 166 seek to make the discretion of the court explicit, not implicit. Amendment No. 163 specifically gives the court discretion over whether the debtor must pay scheduled debts in full or to some other extent. AmendmentNo. 164 would ensure that the court has discretion over arrangements made in respect of several different creditors. That is vital because only the court is in the proper position to be aware of special circumstances that may affect the treatment of different creditors; meaningful guidance would be difficult to offer simply by regulation. Amendment No. 165 makes it clear that the court has discretion over ordinary payments other than by instalment, when there are appropriate circumstances. Amendment No. 166 tackles the rather ominous stipulation that the
“repayment requirement may include provision in addition to any that is required or permitted by this section.”
The amendment stipulates that any such inclusion is also at the court’s discretion and cannot spring, like a jack-in-the-box, from regulations that are yet to appear.
At the very least, the clause must distinguish more clearly between what the court may make a condition of an administrative order, at its discretion, and what it must do, as required by the regulations. Administration orders will be used by vulnerable people in difficult circumstances. I believe that the clause, as drafted, will sow the seeds for conflict between proper judicial discretion and administrative prescription. I should like the Minister’s assurance that no such conflict is anticipated. The amendment is thus just a probing amendment.
Amendment No. 167 is an attempt to clarify what the Government intend by the stipulation that repayments should be made by instalment. I am not sure that we share a common definition of an instalment. Proposed new section 112E(10) of the County Courts Act 1984 will provide for repayments
“to be made by other means”
including lump sums, in addition to instalments. That is not necessarily a sinister suggestion, and I can see the intention behind it. If a debtor has a meagre income stream but access to a lump sum, the lump sum should be available for use in settling the debt. However, it is not clear to me that subsection (10) is necessary for the achievement of that objective, and I believe that it would be better to omit it.
The repayment requirement is based on payment by instalments, but instalments are, to my mind, merely sums of money provided at agreed times in part settlement of a debt. It is perfectly conceivable for one large initial instalment to be followed by several smaller, regular instalments. Indeed, that is common practice in credit agreements that I have seen, whenthe first sum represents a deposit or when there is an agreed scope to vary instalments depending on an individual’s circumstances. Credit card debt is predicated entirely on the principle that payments are regular but that the amounts vary depending on the debtor’s available resources. They are still instalments in settlement of a debt. It would therefore be in the spirit of an instalment plan for the court to require one or more lump sums followed by smaller regular payments based on surplus income.
It seems to me rather complicated and potentially confusing to tell a debtor, “Here is your initial instalment plan, but the court may still ask you for additional lump sums on top of that.” I should welcome the Minister’s comments on whether an instalment plan, within the normal meaning of the phrase, is capable of achieving what the Government intend, without the inclusion of new subsection (10).

Vera Baird: I compliment the hon. Gentleman on his analysis. Our view is that there is no need to insert the phrase
“subject to the discretion of the court”
because the power is entirely permissive. The word “may” is sufficient to allow the court to exercise all its discretion in making the decision. I assure him, if that is his concern, that administration orders will be made on a case by case basis, and on no other, wholly with regard to individual circumstances.
Amendment No. 167 would indeed exclude the new section 112E(10), which would allow the court to decide, taking account of individual circumstances, whether it would be appropriate for the debtor to make a lump sum or other kind of payment in addition to normal instalments. Apart from the perhaps semantic point—I do not mean that as a criticism—about what is an instalment and what is a lump sum, I have not, I am afraid, fully understood what in the subsection is worrying the hon. Gentleman, so if I do not deal with the root of his worries I know that you, Mr. Bercow, will allow him to return to the matter.
The provision is there because in addition to a normal instalment order, a debtor might somehow get some more money—from a bonus or a windfall, for example, or by disposing of assets—and it may become appropriate for the court to make an additional order. Instalment is intended to mean a constant series of similar instalments, although they can be variable. That is all that the clause is about; there is nothing sinisterin it.
I hope that I have reassured the hon. Gentleman, but he can come back to me if he still has concerns that I have not dealt with.

Brooks Newmark: I thank the Minister for dealing with my concerns. I especially appreciate her point about the importance of reflecting an individual’s circumstances, and I hope that the Government’s proposals will deal with that matter.
I think that the Minister has clarified for me the flexibility of what is being proposed: that there is an ability to vary instalments. I was concerned because the amount of an instalment and the pattern in which it is paid are usually of a fixed nature. Normal ways of repaying debts can vary. Lump sums can be paid upfront or at the back end, and the amounts themselves can vary at every stage during the instalment plan. If the Minister is giving me an assurance on the proposal I will not press the amendment to a Division, but I ask her to reaffirm that I have understood what she said.

Vera Baird: One would expect that instalments would be ordered to be regular, although I can understand what the hon. Gentleman is saying. If, after paying instalments of £10 a week for six months, the person concerned was in work again and the creditor wanted the instalment to be increased from that point, it would none the less still be an instalment. However, what is proposed is merely the ability, if some money falls into the hands of the debtor, for the court not to be tied to the instalment provision but to facilitate its being flexible, and notwithstanding the instalments, to be able to order a lump sum to be paid, or a lump sum instead of the rest of the instalments. The proposalis about flexibility, which, as the hon. Gentleman perceived, is important.

Brooks Newmark: Once again, I thank the Minister for clarifying that point. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Brooks Newmark: I beg to move amendment No. 168, in clause 101, page 67, line 27, after ‘interest’, insert
‘above the Bank of England base rate’.
This is a probing amendment on a very sensitive issue, which aims to establish whether it is equitable for creditors to charge interest on debts scheduled under an administration order if the rate of interest is kept at the Bank of England’s rate. The principle in play in the clause, and throughout this part of the Bill, is the need to strike an adequate balance between the obligations of the debtors and the rights of creditors.
Although much of our recent discussion has been about protecting the obligations, and even the needs, of debtors, we must respect the fact that creditors have rights, and recognise the legitimate expectations of creditors who have acted responsibly, by allowing all creditors to charge some interest on debts that are scheduled to administration orders.
It is right that the debtor should be given shelter by the court from punitive rates of interest and charges when they get into difficulties. Hon. Members have heard some of the heart-stopping statistics on personal debt, especially in the aftermath of Farepak’s collapse, when home credit providers aggressively targeted those who had lost out.
It is easy to see the potential of the debt trap when reputable store cards can charge consumers interest rates of around 30 per cent. On a rate of just 25 per cent., it would take 12 years to pay off a £1,000 debt by making minimum payments and would eventually cost over twice the original sum borrowed. At the more aggressive end of the home credit market, which we looked at in the Treasury Committee, it is now impossible for a debtor to clear their debt once they get into difficulty. But allowing interest rates that do not exceed the bank’s base rate would be a compromise that also protected creditors’ rights. I hope that doing so would also be in line with a general principle that judgment debts do carry interest.
There are at least two perspectives on this issue. The first would be to say that creditors are lucky to receive any repayments at all and leave it at that, but the alternative is to admit that creditors should have the right to levy reasonable interest until the debt has been redeemed, even if the rate is substantially lower than the one previously agreed with the debtor. I should therefore be grateful if the Minister could tell us whether this issue was considered in her consultation and whether she might be prepared to revisit it now.

Vera Baird: The amendment would allow creditorsto receive some payment by way of interest, while governing the amount of interest so that it could not be punitive. The point is to stop interest being charged once an order comes into force. A debtor at that stage needs an end point and to start to be rehabilitated. That is our thinking and why we have made the provision in the new section 112H(2) under this clause, indicating that no more fees, charges or interest may be charged while the order is in place.
The idea is to get the maximum repayment available from the debtor so that the total debt or the largest possible proportion of it will be paid back within the maximum period of five years. The orders have an end point. There is no mechanism to extend the endpoint. It is intended to be a finite solution. If interest were added—this would present certain technical problems—there is a danger that the total debt could go beyond the maximum limits set in the regulations, which may be about £15,000. In that circumstance the court would have to revoke the order. That element of uncertainty is undesirable too.
The other point is that we consulted about adding interest at this stage and ascertained that the general view was that we were taking the right approach and that it was good to offer an end point and then work to rehabilitation and to leave interest out of the equation from then on. I hope that the hon. Gentleman can be persuaded to withdraw the amendment.

Brooks Newmark: I am encouraged by some of the points that the Minister made. However, I have another scenario to put to her which might help to clarify my argument. The first scenario involves an individual who owed £5,000, of which he could afford to repay only £3,000. A deal would be struck that was effectively below par value of that debt—par being £5,000 and the discounted amount being £3,000. Clearly he would not have the wherewithal to pay any interest. The point that the Minister makes is absolutely right.
In a different scenario in which, let us say, the amount is again £5,000, but the individual’s earning capability is such that a negotiation is struck enabling him to pay back the full amount at par value but over a period, common sense tells me that there is an ability to pay some interest. Assuming that interest rates remain as they are—reasonably low—the amount that would accumulate at base bank rate on the par value of the debt would not reach the sort of amount that it would, for example, on a credit card.
I am trying to differentiate between a negotiation on a figure that is below par value—the £3,000 example in which the person does not have the wherewithal to repay the full amount—and the £5,000 par value example, in which the person clearly has the ability to pay everything back, but in which the Minister seems to be suggesting that he is unable to pay any interest at all to somebody who has lent him that money in good faith.

Vera Baird: I appreciate the difference between the two scenarios, but in this part of the Bill we are considering somebody who has got himself into debt and is helpless to get out of it on his own.

Henry Bellingham: On that point, I have just been looking at remedies other than bankruptcy. It strikes me is that we are considering not just people who have got into debt through gross irresponsibility or who have built up a huge amount of debt on credit cards, but a small minority of sophisticated business people who have got themselves into debt and who do not want to go bankrupt. They are looking for remedies other than bankruptcy to sort out their debts, andthey might have received credit from other private individuals. Should there not be a way of distinguishing between banks and finance companies that offercredit, and individuals who provide it for other individuals? In the latter case, there might be an argument for them to receive some interest on the credit that they have made available.

Vera Baird: I can see the scenario to which the hon. Gentleman refers. However, here we are trying to deal with people whose debts have overwhelmed them, whatever category he wants to put them in. They are taking a fairly significant step for the present and the future in entering, through the courts, into an order of the kind that we are considering. All the way up to that point interest will have run on the loan, on the judgment debt and so on. Only when that is clear will that person be able to engage the court to save him from his predicament, and then the interest will stop running. By then, it will be a finite problem; the point will be to get rid of the debt. It seems to us that, given that he will be a long way down the road at that point, it will be appropriate to stop the interest running on—the creditor will have received it all the way until then—and to concentrate on rehabilitating the debtor and getting the debt paid off as quickly as possible. I invite the hon. Gentleman to agree that that is a very reasonable way in which to see the matter.

Brooks Newmark: I thank the Minister for addressing my concerns about the rights of creditors and answering the question put by my hon. Friend the Member for North-West Norfolk on a sensitive issue. I hear what she says and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Brooks Newmark: I beg to move amendment No. 169, in clause 101, page 70, line 13, leave out ‘2006’ and insert ‘2007’.
I am not sure whether I am being pedantic or whether there is a clerical error here. I believe that the date should be 2007 and not 2006. If the Minister could correct me on that, I would appreciate it.

Vera Baird: I think that the Government could rightly be accused of optimism on this point. I understand that what happens is that it will be updated anyway when the Act is printed, but I am grateful for the prompt.

John Bercow: I am not sure that procedurally the Minister is correct, but in any event, my understanding is that if the hon. Gentleman wishes to press the amendment, it can be pressed, and I must put it to the Committee for its verdict.

Brooks Newmark: I wish to press the amendment.

Vera Baird: I am overwhelmed with delight to be able to accept it. There are those behind me who wanted to vote, but I will control them.

John Bercow: As the Minister has accepted the amendment, no vote is required, but I still need to put the question.

Amendment agreed to.

Brooks Newmark: On that minor victory, I should almost like to retire, but I shall press on.
I beg to move amendment No. 170, in clause 101, page 76, leave out lines 4 to 17.
The amendment concerns the calculation of a debtor’s qualifying debts for the purposes of seeking them through an administration order. I am concerned that this seems a rather abstruse business. Regulations will be prescribed as to the maximum sum that a debtor can earn and still be subject to administration order. I accept the need for a figure to be set, but I hope that the Minister will help with why the calculation of qualifying debts is envisaged to be so complex that it cannot be left to a county court.
Qualifying debts are all debts that have arisen before the date of the calculation, and it is already abundantly clear that the debtor cannot pay off any business debts. Can the Minister explain the complexities that necessitate further regulations on this subject? Can she also explain why the new section 112AD(3) is worded as it is:
“Regulations must make further provision about how the total amount of a debtor’s qualifying debt is to be calculated.”?
That is very strong. It suggests that the Government have already given this some significant thought, and if so, can we see the draft regulations, if the Minister actually has issued them?

Henry Bellingham: I endorse what my hon. Friend has just said. One of the things that told me a little in looking at proposed new section 112 AD, headed “Calculating the debtor’s qualifying debts”, is, as he pointed out, subsections (3) and (4), where the text talks about the regulations making further regulation and about how the total amount of qualifying debts has been calculated. Under subsection (4), regulations “may” make provision. I should like the Minister to explain why they “must” in subsection (3), but not in subsection (4). Why is there a difference? Why is one subsection more powerful and stronger than the other? As my hon. Friend mentioned with regard to the regulations, the Government—with respect—have had a long time to get the Bill right. It has been a long time coming and we have had a series of publications, with a Green Paper and a White Paper, and a huge amount of consultation with all the different sectors.
As far as I am aware, the only part of the Bill that came as a bit of a surprise—the hon. Member for North Southwark and Bermondsey alluded to this—is part 6, which relates to works of art. The Government have had a huge amount of time to get the structure and detail absolutely spot on in relation to debt management and relief, and things such as administration orders. I will press the Minister further: we hear of future regulations, but surely we ought to know now exactly what the position is now.

Vera Baird: The amendment would remove the means of calculating a debt as qualifying debt, which is a vital component of the new scheme: we need to know what the debtor owes. It would also stop the court taking account of debts arising before the order was made but not yet due for repayment—for example, debts under a deferred credit scheme. We oppose the amendment because it would not allow provision to be made for the court to add up his indebtedness, so the court would not be able to make a decision on whether an administration order is the best method of assistance available to him.
Allowing that assessment to be made of the debtor’s true indebtedness could result in his being directed to a better way forward than the administration scheme, so it is imperative to allow the court to advise and direct the debtor in any way that is most advantageous to him.
“Must” and “may” in subsections (3) and (4) are there for the following reasons: subsection (3) is about the total amount of the debtor’s qualifying debt, so it is imperative that the system of administration orders functions, and that it is clear and certain what a qualifying debt is. It must be clear what his total is. It is imperative that there are regulations set out that point to a fixed sum when his personal circumstances are considered.
My guess is that it is less important to work outhow the amount of a particular qualifying debt is calculated. Flexibility about that can adequately be reflected in rules that we are likely—though not obliged—to make. If we do not make it compulsory to have regulations on how the total qualifying debt is calculated, people will not be able to ascertain with certainty what it is. It is important that that regulatory power is there and that we can direct it to happen. We will consult on all this, as we have on everything else.
In paragraphs 275 and 276 of the policy statement, with which Opposition Members are quite familiar, we have set out the Government’s current thinking on this. We do not have regulations ready yet, because we want to consult, and I cannot say exactly when they willbe ready, but hon. Gentlemen can see that the document—I do not know whether they have it—says:
“To ensure that the reformed scheme meets its objectives, the court will take into account all the debtor’s existing qualifying debts for the purposes of meeting the prescribed maximum, regardless of whether or not a debt is due at the time of the calculation. This enables the court to consider the impact of deferred debts that will become due during the lifetime of the order and avoid the need to revoke an order where such a debt will cause the total debt to exceed the prescribed maximum”.
It then reiterates that the Lord Chancellor is
“to make provision about how the total amount of the debtor’s qualifying debts are to be calculated to ensure that a standard approach is taken”.
That is the point that I have tried to set out.

Tobias Ellwood: My hon. Friend the Member for North-West Norfolk mentioned the amount of consultation that has preceded our debate. I believe, if I recall correctly, that when we discussed the first part of the Bill, on tribunals, the Minister mentioned that there would be a consultation period in the autumn. Will that focus purely on that part of the Bill or will it cover the aspects that we are discussing now?

Vera Baird: There will be a whole raft of overlapping consultation processes, but there would not be any significant point in linking this one with the oneabout tribunals. We obviously want the regulations to come into force as early as possible, because the administration order provision is not of much use unless we know exactly how the qualifying debt will be calculated. The political will to get the regulations ready is definitely there, but we want to ensure that we have all the appropriate consultations. As the hon. Gentleman correctly recalled, it is intended that the consultation on tribunals will take place in the autumn, and this one will start in the summer, as we want to get it under way quickly.

Simon Hughes: I have one comment—not on the regulations timetable but on the amounts criteria. As the Minister and other hon. Members know well, the simpler and the more aligned are the amounts that qualify or disqualify people for something—in the present case, the debts are taken into account—the easier it is for advisers, including people in citizens advice bureaux.
Will any parallel scales, tables or precedents beused? Amounts are easier to comprehend if they are expressed in round figures and multiples of 5,000, if they remain the same for a while and if any change is well publicised and regular. This part of the Bill is good, and I want it to work in the most user-friendly way and with least complication for the people whouse it.

Vera Baird: I do not know whether tables can be replicated for use in relation to the present provisions. Obviously, there is a wealth of experience among precisely such bodies as the citizens advice bureaux, and we shall want to tap into that when we assemble the new system for helping people out of debt.
On the timetable, I hope that I have made it clear that the tribunal consultation will be in the autumn. We shall consult on the regulations that are the subject of our current discussion in the summer.

Tobias Ellwood: I am sorry to press the Minister, but there remains concern among all Conservative Members. There has been significant consultation in the lead-up to the Bill. However, we identify with the spirit of opinion that has been expressed on how the various aspects of the Bill—on tribunals, courts and enforcement—should be implemented when it becomes an Act. If there is a consultation period after enactment, it could significantly change the direction of the new legislation from that for which support has been expressed in our debate. There has been enough consultation; more of it would put the cart before the horse. When the Bill leaves Parliament, there should be enough direction that yet further consultation is not required.

Vera Baird: There cannot be a change of direction. There is enormously long legal history whereby regulations can fit only within the framework of an Act and must not be ultra vires, so the regulations could not take us in a different direction. With respect to the hon. Gentleman, we need to keep our feet on the ground. We are talking about how to calculate people’s debt. The legislation contains a scheme whereby debtors can be helped out of their debt position, and it is important to scrutinise that scheme properly now. The consultation on how debts will calculated will come within the ambit of that scheme and not outside. There will soon be consultation and discussion in the House.

Brooks Newmark: I appreciate the Minister’s explanation and accept particularly her points about the timetable and ensuring that debtors can take the most advantageous route. In the absence of providing the further information that Opposition Members have requested, I hope that the Minister will give us all time to reflect, at a later stage, on the points that we have tried to make with the amendment, which I shall not press to a vote.

Vera Baird: I am not aware of any requested information that I have not supplied. If the hon. Gentleman sets out what he wants to know, we will do our best to comply.

Brooks Newmark: My hon. Friend the Member for Bournemouth, East was seeking some information; I am sure that he will clarify the matter.
 Mr. Ellwood rose—

John Bercow: Order. We need to know on whom a Member is intervening.

Tobias Ellwood: I think that we are still intervening on the Minister, are we not?

John Bercow: No; Mr. Brooks Newmark has the floor. If the hon. Gentleman wishes to intervene at this stage, he might do so on his hon. Friend. If he waits until his hon. Friend has resumed his seat and the Minister chooses to rise, he might then have an opportunity to intervene on her.

Brooks Newmark: Thank you, Mr. Bercow. I shall take my seat again, so that my hon. Friend can clarify the position.

Tobias Ellwood: Will the Minister give us a full description, on Report, of what the consultation will involve? Who will participate in it; how long will it be; and what will be its broad nature? I do not challenge the need to provide an approach that is not exactly broad-brush—it is detailed—but that requires some engagement with the various organisations that will use the legislation. The Minister has twice said that there will be summer and autumn consultation periods. Who will be invited to participate in those consultations and what will be their scope? I appreciate that she might not be able to provide that information now, but it would be useful on Report.

Vera Baird: I am happy to comply with the hon. Gentleman’s request. I did not appreciate exactlywhat he wanted to know, or I would have answered straight away. Normal Cabinet Office provision for consultations will apply. There will be three months’ consultation, and it will be made public that a consultation will take place. I do not doubt that individual organisations known by the Governmentto have an interest in the matter will be directly approached for input, but the general publicity surrounding the consultation will be directed to all relevant areas in the hope that interested parties will come forward as well. The consultation will be as comprehensive as possible, because it is important to get things right. The way to do that is to consult the maximum number of people with the maximum amount of experience, to reflect on their responses and to produce an answer to the House.

John Bercow: I think that, before the Minister intervened on the hon. Member for Braintree, he was signalling that he wished to withdraw his amendment.

Brooks Newmark: Yes; thank you, Mr. Bercow. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Brooks Newmark: I beg to move amendment No. 171, in clause 101, page 76, leave out lines 26 to 28.
The amendment goes further in attempting to resolve the possible conflict between the court’s  discretion and the regulations by omitting the need for regulations altogether. That is desirable for a single reason: I do not want any district judge to have to tell a debtor that, although he would like to schedule the debts in a way that is fair, just and reasonable, the regulations prevent him from doing so.
If the court has discretion over the amount of debt to be repaid and which creditors take priority under the order, it seems unnecessary to fetter its discretion over the amounts of the repayments. However, if it is the Government’s view that the court needs guidance on the calculation of surplus income and the nature of the instalments, would it not be reasonable also to offer it guidance on the total sum to be repaid? It seems that the court is being trusted with some decisions, but not others. I therefore seek the Minister’s clarification on why that should be so and what reasoning has been evoked to justify the differing treatments?

Vera Baird: This amendment would remove the power to make regulations that will allow the Government to prescribe a consistent approach, across all courts, to the calculation of the amount of instalments in relation to a debtor’s surplus income. Consistency is a key feature of the scheme, which received support from all sides. It is better to have a framework within which the courts can apply their discretion to an individual set of circumstances, to avoid an incompatibility between what happensto someone in court jurisdiction A and what happens to someone in a similar position in court jurisdiction B.
I am told that creditors are keen to see an end to the current system in which different courts make vastly different orders on individual circumstances that are largely the same. The advice sector also favours a national system that will ensure a consistent approach to these issues, and one imagines that it will feel competent and more empowered to advise with a good deal of certainty.
Therefore, regulations made under proposed new section 112E(9) of the County Courts Act 1984 will ensure a consistent approach based on the ability to pay, probably using a version of the common financial statement, which is widely accepted across both the credit and the advice sectors as the most comprehensive and best tool for doing that kind of assessment. That type of scheme is not appropriate for those with insufficient surplus income to meet the commitment. The revised scheme is targeted at those debtors who can afford to make reasonable repayments up to the five-year term of the order.

Brooks Newmark: Unfortunately, I am a bit of pedant on language. The Minister used the word “probably” in relation to the use of the common financial statement. Is there any ambiguity that I should be concerned about? Is there something else that she is thinking about or will the system be based on a common financial statement?

Vera Baird: No, the system is part of the regulation-making process that I have already described to the hon. Member for Bournemouth, East. The common financial statement commends itself to us as the appropriate tool, and it is widely used by advice agencies. However, if somebody has come up with a better tool by June—if that is when summer starts—we would be open to the suggestion of using it instead. That is the direction of our thinking at the moment. It is our preferred tool, but there will not be much deviation from a tool that is similar to the common financial statement. Nevertheless, we will leave the options open until the consultation has been held.
If we accepted the amendment, it would prevent the introduction of a common procedure for determining instalments. Each court would carry on making its own assessments based on locally devised criteria, which would add complexity, cost and—overwhelmingly what we do not want—uncertainty. We therefore urge that the amendment be withdrawn.

Brooks Newmark: Again, I am encouraged by what the Minister has said. I understand the need for debtors to pool their obligations on the basis of a common financial statement. She mentioned other tools that are available, but I cannot think of any alternative other than a common financial statement. However, if she wants to leave flexibility for that open, I probably would not object to it—although I cannot imagine what it would be. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause, as amended, stand part of the Bill.

Simon Hughes: I should like to ask a general question about the clause and this welcome part of the Bill. This is the first clause stand part debate under this part, which tries to find systems whereby people with small or medium debts can have them managed in a way that resolves the problems. There was a helpful introduction in the explanatory notes, supplied bythe Government to all Committee members and available through the Vote Office, explaining the background and the alternatives: administration orders, enforcement registration orders, debt relief orders and debt management schemes.
I have two generic questions about both orders in the clause and their context. First, on a practical matter, if somebody gets into personal debt, what is the sequence or process that will determine the alternative route out of it? Options are available. In the explanatory notes, the administration orders are described as a
“scheme for those with multiple debts totalling no more than £5,000, one of which must be a judgment debt.”
There is, as we will see in a little while, a set of arrangements under what are now called debt management schemes. The idea is to prevent people from going into bankruptcy and to try to reach an arrangement that, in many cases, comes to an end in a year, so that, in that time, matters can be resolved by agreement and the creditors will accept that they will not necessarily get all the money to which they are entitled. However, in return, they will get some of the money and the debtor will honour the agreement and pay that off.
The arrangement also seeks to resolve a real life problem, which is that some people get themselves into a financial muddle and do not have the financial wherewithal to sustain the obligations. As we probably all know from our personal circumstances, it is much easier to manage one repayment arrangement than many. The people who get into the biggest difficulty in life are often those who try to juggle repayments here and there.
If people are being chased, quite properly, by creditors for money that they are obliged to pay, from whom and where can they seek advice in the court structure? The matter relates to the context of the court structure, which will set out the sequence, or the best choice, for people to follow. Again, that reflects our debate a moment ago; it is about ensuring that we clog up the courts as little as possible, get as much agreement as possible and that creditors who are owed money get it, whenever possible. Above all, however, it is about debtors getting into as little further difficulty as possible, with all the knock-on effects and consequences.
I bridge that point, on my way to my second question, by reminding Committee colleagues about figures that we all know. There is now record personal indebtedness in this country. I have heard in the past few days that that may just have levelled off. The figure in my head is some £13 trillion, which is an incredible, almost unimaginable figure. However, people are willing to consider debt, because of the amount of mortgage that they can take out—five times their income—and because of the number of consumer goods that they are buying. This country is saddled with debt, which is fundamentally problematical for Britain and not a sign of healthy long-term economic stability.
Secondly, in case we agree to this part of the Bill, particularly the part on debt management schemes, has the Department conducted an assessment of what that will mean in debt reduction? How many people will be affected? In the Library research notes and the notes on clauses, I have been able to find only the following figures. Paragraph 384, under “Debt Management Schemes” in the departmental explanatory notes, says:
“It is estimated that over 25,000 such debt repayment plans were arranged in 2004 and there are currently around 70,000 active plans.”
I have not found an assessment of the likely impact on indebtedness and the number of people in debt. How many people are expected to be taken out of indebtedness and out of the courts? It is an important generic issue as well as a social policy issue.
The measures seem to be a good idea. They are a welcome part of the Bill, and everybody has been positive about them, but does research suggest that they will make a significant or only a small impact? I should be happy to receive any information that the Minister can give me or point me toward. It would put the measures in the wider context of helping people get out of the pressured position of being in debt, which causes people in our constituencies illness, grief, family breakdown and worse. I hope that the measures will take some small steps to alleviate that.

Vera Baird: I do not accept the description of a nation saddled with debt. Debt is important. It is difficult to live life without substantial debt. I would have to live in a tent if I did not have a debt called a mortgage. The Government are worried about, and have taken the new steps to address, debt that is out of control. Debt is a useful tool when properly controlled.
We have altered, extended and changed an existing system of coming to terms with debt. It is a system of mutual undertakings whereby the debtor agrees that he or she will pay off a certain amount and, as the hon. Member for North Southwark and Bermondsey said, is relieved of the management of many repayments. Creditors acquiesce in having their ability to take further action restricted so long as the payments are made.
That is of course a court-controlled procedure. It will need to go to the courts, so the options that we have been discussing—mediation, alternative dispute resolution and so on—will have passed by the time we get to such a position. There is no doubt that advice is available. I chronicled its availability a few days ago. Agencies such as citizens advice bureaux, law centres, solicitors, the Department of Trade and Industry, financial advisers and advisers financed by the financial inclusion fund are available, as is outreach to contact people whose debts are causing them significant stress and difficulty. One would expect that kind of advice to encourage an individual to come to court to ask for such assistance. It is not inconceivable that, on some occasions, the creditor might suggest it, and the individual might take advice and see the wisdom of it.
In so far as I can help the hon. Gentleman, those are likely to be the mechanics of how the helpful provisions will come into play in a troubled individual’s life. I cannot give him any significant figures on how many such schemes we expect to emerge. There is only anecdotal material at present, and study is ongoing, but he is right that there are about 25,000 administration orders a year. That must give some guideline about what is likely to follow from the various versions of debt management. I cannot say more than there are 25,000 orders a year now, and that that number may exist in future. I am reflecting on whether I have answered all that he asked—I think that I have.

Question put and agreed to.

Clause 101, as amended, ordered to stand part of the Bill.

Schedule 16 agreed to.

Clauses 102 and 103 ordered to stand part of the Bill.

Schedules 17 to 20 agreed to.

Clause 104

Debt management schemes

Brooks Newmark: I beg to move amendment No. 173, in clause 104, page 89, line 31, after ‘persons’, insert
‘approved by the relevant supervisory authority’.
The introduction of approved debt management schemes is welcome, but only in so far as the supervisory and approval regime is sufficiently rigorous. Subsection (5) establishes that the scheme must be operated
“by a body of persons”.
I presume that the intention is to prevent individuals from offering schemes. Our amendment goes further and would require the supervisory authority to approve not only the scheme, but the body offering it. That matters because the schemes will in time be marketed as approved. They will receive the seal of approval from the Government and presumably use their new status to drum up business. There will be no surprise if existing individual voluntary arrangement providers offered their own debt management schemes for that very reason.
Encouraging providers to seek approval for their schemes may well be a pragmatic alternative to regulating the entire IVA sector, although there are legitimate concerns that the Government have missed an opportunity by not choosing to regulate. Whatever the intentions behind the clause, the purpose of the amendment is to ensure that debt management schemes cannot be operated by individuals who are entirely unvetted by the supervisory authority. That would create a risk of unscrupulous providers operating one approved scheme, which they can market as such, among many others and thus leave the public to draw the inference that all their services have been given a Government kitemark. It is ultimately a matter of perception.
During the course of its investigation, prior to the approval of a scheme, the supervisory authority might look closely at the body offering it. In that case, nothing would be lost by the Bill stating explicitly that the provider, as well as the scheme itself, is approved. I therefore seek the Minister’s assurance on that point.

Simon Hughes: We support the amendment. I can understand that, in a free market economy, it could be left to anyone to run such a scheme, but there is benefit in having official trade-marked, branded kitemark schemes. Given our long debates about regulation bailiffs and the Security Industry Authority in respect of bouncers and security outside pubs and clubs, it would be sensible to think of such matters now and not wake up only after the Bill is enacted. I hope that the Minister will be sympathetic to my argument.

Vera Baird: Amendment No. 173 would require those who operate debt management schemes to be
“approved by the relevant supervisory authority’.
The Bill contains what is in a sense a double-decker scheme. A scheme that wants to benefit from the powers set out in clauses 109 to 116 will have to be approved by the supervisory authority dealt with in clause 106. However, seeking such approval is optional; scheme operators will have to decide whether they want to offer an enhanced scheme. When schemes do not have the approval of the supervisory authority, they will still be able to offer debt management schemes, but they will not have the powers available to those who do have such approval. The schemes that do not have the new powers will operate as they do now and will be totally dependent on the voluntary participation of the creditor.
I hope that the hon. Gentleman accepts that there is a scheme for approval and that those who choose not to seek approval will have only a limited range of powers available to them, although they will be able to offer a service based on the voluntary acceptanceof debtors. No doubt such acceptances will be forthcoming. I hope that that flexibility is sufficient for the hon. Member for Braintree, because it commends itself to the Government.

Brooks Newmark: Again, the Minister has not really persuaded me. My concern is that if there is some sense or perception on the part a scheme that it has, even in law, the approval or Government backing for what it is doing, it may be out there marketing itself as a professional operation that has the stamp approval of a regulated body. That might open the system to some level of abuse. I appreciate that such abuses might happen only at the margin, but the whole point of having a regulatory body and of regulatory approval is to protect the innocent and the vulnerable from those that might prey on them. Will the Minister once again clarify, perhaps more formally than she has, what the schemes are and under what restrictions they will operate?

Vera Baird: The operators of approved schemes have to be companies or partnerships, not individuals. It is likely that the CAB might itself go into such territory. The hon. Gentleman will know about the Consumer Credit Counselling Service, which deals with debt management concerning credit cards and personal loans, and Payplan.
Regulations will control and limit advertising,which might provide further reassurance to the hon. Gentleman, who suggested that people might misrepresent the supervision under which they operate when offering a scheme. For a company to misrepresent itself by saying that it has the authority of a court to offer a scheme when it does not, or by saying that it has powers that it does not have, would certainly be an abuse of the scheme and would likely be a criminal offence, probably under the terms of the theft Acts. I hope that that reassures him on the issue of false advertising. There is scope in the Bill to limit or control advertising.
I hope that I have reassured the hon. Gentleman, albeit not exactly how he envisaged—a depth of worry about the matter is unnecessary. Some schemes will probably be run by wholly virtuous bodies such as the CAB, which do not have powers. The input of the supervisory authority will be necessary before such bodies can have more powers.

Brooks Newmark: The Minister’s words may be reassuring, and I take on good faith what she says, but I am still not overly convinced that there will not be some abuse out in the big wide world. However, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Simon Hughes: Subsection (2) states:
“The scheme must be open to some or all non-business debtors.”
My understanding is that a scheme could be set upthat dealt with all groups of people. I do not see from the notes on clauses what sort of groups have been thought particularly relevant. I understand that the arrangement is a permissive one, so anyone could come up with a proposition, which would then be approved under the system, but will the Minister suggest possible sub-groups of non-business debtors? Might it be the category of women’s debt or debts of certain ethnic or other communities? I am trying to get behind the words to see what the thinking is, because it is not clear from the Bill.

Vera Baird: I do not think that it has been thought through any further than it says—that schemes must be open to some or all non-business debtors. I have not contemplated that people would set themselves up particularly for black or minority ethnic debtors or women debtors, but I suppose that that is not impossible. Perhaps membership organisations might want to offer that kind of service to some of their members rather than to others. I think that the opportunity that is offered by the provision—although opportunity is rather too positive a word for what we are talking about, which is debt management—means that there will be organisations that are happy tostep into the breach and take on non-business debtors of various kinds. There is maximum flexibility in chapter 4, and particularly in clause 104, to allow for all that. I suppose that the kind of organisations that the hon. Gentleman has mentioned might become involved; there might be some who wanted to focus on women, disabled people or mentally ill people, and so on. I do not know, but the scope is there if they wanted to do that.

Simon Hughes: That is helpful. In relation to what is an embryonic concept, I hope that when those who avail themselves of the opportunity, as the Minister put it, refer to the debates, they will reflect on the probable wisdom of setting up schemes to be offered to all debtors rather than to some groups. It becomes invidious, often, if people knock on a door and are told, “I am sorry, but you do not qualify for the service if you are not in the relevant community.” We should try to encourage arrangements that are as inclusive as possible, not as exclusive as possible.

Question put and agreed to.

Clause 104 ordered to stand part of the Bill.

Clause 105 ordered to stand part of the Bill.

Clause 106

Approval by supervising authority

Brooks Newmark: I beg to move amendment No. 174, in clause 106, page 90, line 11, leave out ‘may’ and insert ‘shall’.

John Bercow: With this it will be convenient to discuss the following amendments:
No. 175, in clause 106, page 90, line 21, leave out ‘may’ and insert ‘shall’.
No. 177, in clause 110, page 91, line 30, leave out ‘may’ and insert ‘shall’.
No. 176, in clause 115, page 93, line 24, leave out ‘may’ and insert ‘shall’.

Brooks Newmark: Amendments Nos. 174 to 177, which on the face of it would replace the word “may” with “shall”, are probing amendments to establish how rigorous the approval of the supervisory authority will be, in effect. I am concerned that the word “may” appears many times in this chapter of part 5. The amendments in this group do not include all of them and an awful lot is to be left to regulations.
Approved debt management schemes and the registration of plans are positive in principle, but the detail of the approval mechanism and the rigour to be exercised by the scrutinising authority are a bit vague. That is compounded by the fact that the proposed supervising authority is the Lord Chancellor or his delegates rather than the Office of Fair Trading or the Financial Services Authority. The authority may approve schemes, but it does not have to do so. Regulations, on the other hand,
“may make provision about...conditions that must be met”
before approval. There is a conflict there: may they or must they?
That theme applies also to the registration of plans under clause 115, which states that regulations “may make provision” about either or both of the situations listed. If the need for regulation is anticipated, it should be declared openly. That is the purpose underlying the amendment—to replace some of the “mays” with “shalls”. I apologise to the Committee that I have not managed to identify them all, but I hope that I have managed to make my intentions clear to the Minister. Will she clarify what will and will not be done by the supervising authority, and what will or will not be prescribed in the forthcoming regulations?

Vera Baird: I am not sure whether it is entirely clear what the hon. Gentleman wants.

Henry Bellingham: He wants some “shalls”.

Vera Baird: He wants some “shalls”, I know that. He wants a lot of “shalls.” I wonder what the collective noun for “shalls” is—a shower of shalls? However by substituting “may” with “shall” in clause 106(1), for instance, which is what amendment No. 174 woulddo, we would end up with the requirement that the supervising authority shall approve one or more debt management schemes, irrespective of whether they are utterly hopeless and inappropriate. That would require the authority to approve one or more schemes but, in truth, it would probably require it to approve all debt management schemes put before it. I am sure that that is not what the hon. Member for Braintree wants.
Under our proposals, seeking approval to operate a scheme with the proposed enhanced powers would be optional. The hon. Gentleman knows that. There is no intention to force operators to offer enhanced schemes; they will have to decide whether they want to do so. There is no certainty about the number of applications for approval that will be received or how many will be judged suitable and how many not. The intention is that the supervising authority will have the power to set conditions that must be met by all scheme operators, so a bedrock of conditions will be laid down. Those conditions will have to be satisfied before a scheme is approved.
Naturally, we intend to consult on the terms of the proposals, including the role of the supervising authority. There is no doubt that there will be a grounding of rules, and all scheme operators will be required to meet them. I expect the rules to be rigorous. Our intention is that schemes will be proper, helpful, well thought through and well worked out, and that they will work for the people who are taken on by them.
I believe that the hon. Gentleman moved on to amendment No. 177.

Brooks Newmark: Did I do that by accident?

Vera Baird: No, I thought that the amendments had been regrouped so that the hon. Gentleman could talk to amendment No. 177, but I am not sure whether he did. He might want to say more about it. I have done my best to address amendments Nos. 174 and 175.

Brooks Newmark: I appreciate the Minister’s response. At this stage I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 106 ordered to stand part of the Bill.

Simon Hughes: On a point of order, Mr Bercow. It might help the Committee if I indicate that my hon. Friend the Member for Cardiff, Central and I will be very happy if you wish to group some of the clauses that follow, except that we would like to say a word on clauses 113 and 124.

John Bercow: I am very grateful to the hon. Gentleman; that is helpful. At this stage, I intend to proceed by taking the next four or five clauses individually.

Clauses 107 and 108 ordered to stand part of the Bill.

Schedule 21 agreed to.

Clauses 109 to 112 ordered to stand part of the Bill.

Clause 113

Stopping supplies of gas or electricity

Question proposed,That the clause stand part of the Bill.

Simon Hughes: The clause concerns an issue that we come across fairly often: people who have their gas or electricity supply turned off. The water service is a linked utility. Those used to be public utilities, but they are now private. The clause is about the process that would in certain circumstances control when supplies could be turned off, and it applies to non-business debtors during periods of protection.
My question is simple. It is partly a DCA-type question and partly a DTI-type one. Just as we now say that people cannot be evicted from their homes without the sanction of a court, we could equally reasonably argue that the electricity, gas or water supply to a domestic property should not be turned off without such sanction. Can the Minister assist me by saying whether she and her colleagues have thought about that argument in the context of this measure? Would they consider introducing such an approach by tabling an amendment on Report, and would such a move beled by another Department or in consultation with other Departments? It seems to me that we have an opportunity to try to do something that would prevent a lot of desperate, and sometimes unsatisfactory, scrambling around.
Let me make two last points. First, I am aware that codes of practice apply in such circumstances, but sometimes they do not work, and I am also aware that there is good practice, which does work. In addition, of course we know that people abuse the system. Secondly, I have often found that such issues can be dealt with by agreeing with the provider a register of people in a community who are vulnerable. For example, when people become of pensionable age,they could register so that special procedures were undertaken. After many years, however, I have not so far found a foolproof system of protecting the vulnerable from having their water, electricity or gas cut off in certain circumstances. The situation is even harder now with the multiplicity of providers in this privatised world of utilities.
I would be grateful to hear from the Minister whether that broader issue has been considered and whether favourable consideration would be given on Report to an amendment that sought to give the same entitlement to utilities as applies in a tenancy or occupancy.

Vera Baird: There is a huge amount of difficulty in defining people who are vulnerable in order to set up any type of register at all. In this context, we are countenancing a person who is in a period of protection or is in the currency of a debt repayment plan, which restricts the ability of a qualifying creditor—a creditor with a qualifying debt—to take any action at all to recover their debt. A series of restrictions bite on those qualifying creditors, and they are, as I have said already to the hon. Member for Braintree, two sides of the coin. The debtor will pay and the creditors will forbear. Quite separate from that structure, there are rules that stop domestic utility suppliers disconnecting services. They must not do that here when they are a qualifying creditor, as is laid down clearly in the provision. More generally, people cannot cut water off without the courts’ consent and I am reasonably sure that the same applies to any utilities, but I am not certain. However, that is a broader point. In this case, utilities that are qualifying suppliers must not take that action to deal a debtor.

David Drew: I was going to make a speech, but I shall make my point in an intervention. I am intrigued about why we are talking about gas and electricity, not water. My hon. and learned Friend may have an easy explanation, but it is  my understanding that it is now virtually impossible to disconnect someone for not paying their water bill. Therefore, I would be interested to know what the differences are. It is still possible to disconnect someone for not paying for gas and electricity, so there is a disparity. It would be interesting to know why no reference is made to water in the clause.

Vera Baird: That is undoubtedly a very good point to reflect on. It is nearly impossible to disconnect someone’s water. My noble Friend Baroness Ashton talked in the other place—it was in a different connection, but linked to the Bill—about the need to negotiate and to engage water suppliers, because they do not have much recourse to recover their debts, as they never can disconnect. In some circumstances—I am not sure when or whether it is with or without a court order—the other utilities can do that. In general, that is an interesting question, and one that we should consider. Within the confines of the Bill, however, we can prevent the gas or electricity supplier from cutting off supplies while the person is protected because they are paying under the arrangement they have come to with their creditors. From the point of view of the Bill, the situation is rock solid, but more widely, my hon. Friend the Member for Stroud is quite right and we should look at the issue.

Simon Hughes: That was helpful. Perhaps the Minister could deal with these points in writing after today’s sitting. First, is there a need to put water in that context? Secondly, on a wider question, is a court order and a court appearance necessary for each of the utilities? If so, can we have reassurance about that? If not, perhaps we can come back to it on Report.

Vera Baird: I do not want to be dragged into offering more than I realistically can offer within the confines of the Bill, just because I am a good-natured, soft liberal person. I have given very strong reassurance about clause 133, which manifestly protects people in such a situation. I rather doubt whether, within the confines of the Bill, we have any possibility of thoroughly getting to grips with all the reasoning behind the disparity that my hon. Friend the Member for Stroud set out for us. However, I will look at the matter and have a conversation with the hon. Gentleman in due course.

Question put and agreed to.

Clause 113 ordered to stand part of the Bill.

Clauses 114 to 123 ordered to stand part of the Bill.

Clause 124

The supervising authority

Question proposed, That the clause stand part of the Bill.

Simon Hughes: I have one question. The clause sets out who the supervising authority is—an issue to which the hon. Member for Braintree referred earlier. Subsection (1) says that it is the Lord Chancellor or anyone authorised by the Lord Chancellor. Whom does the Department have in mind? We went through this last year with regard to some legislation brought forward by the Department. There was an interim arrangement involving Ministers or civil servants, before a transfer to the Legal Services Commission. It would be interesting to know whom Ministers have in mind as an agency—it might be individual or whatever—both on an interim basis and in the long term.

Vera Baird: We do not have anyone in mind,other than the Lord Chancellor, at present. We are introducing clause 124 with an eye to the possibility of the role being delegated in the future. If that ever occurred, it would be likeliest to go to a judicial officeholder, but not inconceivable that it would go to some existing national advice board, such as the citizens advice bureaux. At present, we do not have anyone to whom we intend to delegate the role.

Simon Hughes: I am grateful. I assume that when the time comes there will be the usual sorts of consultation about the appropriate way forward.

Question put and agreed to.

Clause 124 ordered to stand part of the Bill.

Clause 125 to 128 ordered to stand part of the Bill.

Michael Foster: On a point of order, Mr. Bercow. Due to the excellent progress that we have made under your chairmanship this afternoon, I beg to move that the Committee do now adjourn.
Further consideration adjourned.—[Mr. Foster.]

Adjourned accordingly at twenty-eight minutes past Three o’clock till Tuesday 27 March at a quarter to Eleven o’clock.